[LOGO OF REX STORES]
News Announcement For Immediate Release
For further information contact:
Douglas Bruggeman Stewart A. Lewack, Joseph N. Jaffoni
Chief Financial Officer Jaffoni & Collins Incorporated
937/276-3931 212/835-8500 or rsc@jcir.com
REX STORES' SECOND QUARTER DILUTED
EARNINGS PER SHARE INCREASES 169% TO $0.70
- Prior Share Repurchase Authorization Expanded By 1,000,000 Shares -
Dayton, Ohio (August 31, 2005) -- REX Stores Corporation (NYSE:RSC), a specialty
retailer of consumer electronic products and appliances, today announced
financial results and comparable store sales for the three- and six-month
periods ended July 31, 2005 (the Company's 2005 fiscal year).
Net income in the three months ended July 31, 2005 rose 166% to $8.7 million, or
$0.70 per diluted share, from net income of $3.3 million, or $0.26 per diluted
share, in the three months ended July 31, 2004. Net income in the fiscal 2005
second quarter includes $10.4 million of pre-tax income from synthetic fuel
investments, including a one-time $3.5 million payment related to a synthetic
fuel facility resuming commercial operations, compared to $3.3 million of
comparable investment income in the year-ago period. Net income in the fiscal
2004 period reflects an income tax benefit of $1.4 million due to the successful
completion of an Internal Revenue Service examination related to the Company's
Section 29 income tax credits for certain years and a $0.6 million pre-tax loss
on the early termination of debt. Per share results are based on 12,437,000 and
12,854,000 diluted weighted average shares outstanding for the three-month
periods ending July 31, 2005 and July 31, 2004, respectively.
Net sales in the three months ended July 31, 2005 fell 1% to $84.7 million from
$85.8 million in the three months ended July 31, 2004. Comparable store sales
during the period fell 1% compared to the same year-ago period. Excluding sales
of air conditioners in the quarter ended July 31, 2005, comparable store sales
would have declined 5% compared to the same year-ago period. The Company reports
sales performance quarterly and considers a store to be comparable after it has
been open six full fiscal quarters. Comparable store sales figures do not
include sales of extended service contracts.
-more-
REX Stores Reports Second Quarter Results, 8/31/05 page 2
During the three-month period ended July 31, 2005, REX purchased approximately
989,600 shares of its common stock in open market transactions. Subsequent to
the close of the quarter, REX purchased an additional 87,700 shares. On August
30, 2005, the Company's Board of Directors expanded the previous share
repurchase authorization by an additional 1,000,000 shares. Pursuant to this
expanded reauthorization, the Company now has approximately 1,255,945 authorized
shares remaining available to purchase under its stock buy-back authorization.
Net income in the six-month period ended July 31, 2005 rose 101% to $14.8
million, or $1.18 per diluted share, compared to net income of $7.4 million, or
$0.57 per diluted share, in the six-month period ended July 31, 2004. Per share
results are based on 12,602,000 and 12,925,000 diluted weighted average shares
outstanding for the six-month periods ending July 31, 2005 and July 31, 2004.
Net sales in the 2005 six-month period were $174.3 million compared to $170.2
million in the six months ended July 31, 2004, while comparable store sales rose
3%.
The Company will host a conference call and webcast today at 11:00 a.m. EDT,
which are open to the general public. The conference call dial-in number is
212/676-5257; please call ten minutes in advance to ensure that you are
connected prior to the presentation. Interested parties may also access the call
live via the Investor Relations page of the Company's website, www.rextv.com, or
at www.fulldisclosure.com; please allow 15 minutes to register, download and
install any necessary software.
Following its completion, a telephonic replay of the call can be accessed
through 1:00 p.m. EDT on September 7, 2005 by dialing 800/633-8284 or
402/977-9140 (international callers). The access code for the audio replay is
21258881. Alternatively, a replay will be available on the Internet for 30 days
at www.rextv.com or www.fulldisclosure.com.
REX Stores Corporation is a leading specialty retailer of consumer electronic
products and appliances. As of July 31, 2005, the Company operated 228 stores in
37 states under the trade name "REX."
This news announcement contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Such statements can be
identified by use of forward-looking terminology such as "may," "expect,"
"believe," "estimate," "anticipate" or "continue" or the negative thereof or
other variations thereon or comparable terminology. Readers are cautioned that
there are risks and uncertainties that could cause actual events or results to
differ materially from those referred to in such forward-looking statements.
These risks and uncertainties include among other things: the highly competitive
nature of the consumer electronics retailing industry, changes in the national
or regional economies, weather, the effects of terrorism or acts of war on
consumer spending patterns, the availability of certain products, technological
changes, new regulatory restrictions or tax law changes relating to the
Company's synthetic fuel investments, the fluctuating amount of quarterly
payments received by the Company with respect to sales of its partnership
interest in a synthetic fuel investment, and the uncertain amount of synthetic
fuel production and tax credits received from time to time from the Company's
synthetic fuel investments.
-tables follow-
REX Stores Reports Second Quarter Results, 8/31/05 page 3
REX STORES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Six Months Ended
July 31, July 31,
----------- ----------- ----------- -----------
2005 2004 2005 2004
----------- ----------- ----------- -----------
NET SALES $ 84,693 $ 85,814 $ 174,272 $ 170,241
COST OF MERCHANDISE SOLD 59,698 61,483 124,754 121,179
----------- ----------- ----------- -----------
GROSS PROFIT 24,995 24,331 49,518 49,062
SELLING, GENERAL & ADMINISTRATIVE EXPENSES 24,248 23,530 47,055 46,976
----------- ----------- ----------- -----------
OPERATING INCOME 747 801 2,463 2,086
INVESTMENT INCOME 58 58 132 145
INTEREST EXPENSE (714) (784) (1,330) (1,718)
LOSS ON EARLY TERMINATION OF DEBT - (592) - (614)
INCOME FROM SYNTHETIC FUEL INVESTMENTS 10,398 3,343 16,380 8,579
----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION
(BENEFIT) FOR INCOME TAXES 10,489 2,826 17,645 8,478
PROVISION (BENEFIT) FOR INCOME TAXES 1,621 (762) 2,689 672
----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS 8,868 3,588 14,956 7,806
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX (147) (304) (260) (437)
GAIN ON DISPOSAL OF DISCONTINUED OPERATIONS, NET OF TAX - - 125 -
----------- ----------- ----------- -----------
NET INCOME $ 8,721 $ 3,284 $ 14,821 $ 7,369
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 10,871 11,225 11,011 11,190
=========== =========== =========== ===========
Basic income per share from continuing operations 0.81 0.32 1.36 0.70
Basic loss per share from discontinued operations (0.01) (0.03) (0.02) (0.04)
Basic gain of disposal of discontinued operations 0.00 0.00 0.01 0.00
----------- ----------- ----------- -----------
BASIC NET INCOME PER SHARE $ 0.80 $ 0.29 $ 1.35 $ 0.66
=========== =========== =========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 12,437 12,854 12,602 12,925
=========== =========== =========== ===========
Diluted income per share from continuing operations 0.71 0.28 1.19 0.60
Diluted loss per share from discontinued operations (0.01) (0.02) (0.02) (0.03)
Diluted gain on disposal of discontinued operations 0.00 0.00 0.01 0.00
----------- ----------- ----------- -----------
DILUTED NET INCOME PER SHARE $ 0.70 $ 0.26 $ 1.18 $ 0.57
=========== =========== =========== ===========
(more)
REX Stores Reports Second Quarter Results, 8/31/05 page 4
REX STORES CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in thousands, except per share amounts)
July 31 January 31 July 31
2005 2005 2004
----------- ---------- -----------
(Unaudited) (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 1,744 $ 4,671 $ 1,202
Accounts receivable, net 3,458 5,460 3,929
Synthetic fuel receivable 786 1,675 2,288
Merchandise inventory 133,759 124,188 156,167
Prepaid expenses and other 2,807 1,230 1,670
Future income tax benefits 10,929 10,929 8,703
----------- ---------- -----------
Total current assets 153,483 148,153 173,959
PROPERTY AND EQUIPMENT, NET 128,700 129,723 132,953
ASSETS HELD FOR SALE 1,669 1,986 -
OTHER ASSETS 915 841 639
FUTURE INCOME TAX BENEFITS 27,978 27,978 16,082
RESTRICTED INVESTMENTS 2,290 2,270 2,262
----------- ---------- -----------
Total assets $ 315,035 $ 310,951 $ 325,895
=========== ========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 4,031 $ - $ 11,560
Current portion of long-term debt 2,919 2,897 2,899
Current portion of deferred income and
deferred gain on sale and leaseback 9,920 10,432 10,348
Accounts payable, trade 35,599 32,842 57,522
Accrued income taxes - 1,567 575
Accrued payroll and related items 5,093 6,303 4,406
Other current liabilities 6,623 6,152 7,576
----------- ---------- -----------
Total current liabilities 64,185 60,193 94,886
----------- ---------- -----------
LONG-TERM LIABILITIES:
Long-term mortgage debt 28,490 30,501 32,406
Deferred income 11,387 11,703 11,809
----------- ---------- -----------
Total long-term liabilities 39,877 42,204 44,215
----------- ---------- -----------
SHAREHOLDERS' EQUITY:
Common stock 293 290 286
Paid-in capital 135,496 133,474 127,734
Retained earnings 227,450 212,629 192,449
Treasury stock (152,266) (137,839) (133,675)
----------- ---------- -----------
Total shareholders' equity 210,973 208,554 186,794
----------- ---------- -----------
Total liabilities and
shareholders' equity $ 315,035 $ 310,951 $ 325,895
=========== ========== ===========
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